(WIFR) – Municipal leaders prepare for a taxation juggling act.

Starting January 1, 2026, Illinois will eliminate the 1% grocery sales tax. For DeKalb City Manager Bill Nicklas, that begins the juggle. He claims around $800,000 in annual revenue would disappear with the change.

“Is $800,000 noticeable? Well, it is for us,” asserts Nicklas. In Fiscal Year 2025, the city expects $51 million to arrive from general fund revenues. Within that, the city manager says the grocery tax supports general operations, “That pays for our personnel, fire, police, public works, administrators like myself.”

In February, Gov. JB Pritzker emphasized the need to eliminate the tax. “This year, we are going to need to do even more to address high prices and counteract Trump’s tariffs that will raise taxes on working families.”

While the tax will disappear statewide next year, the law allows municipalities to keep it in place – if they so choose. Some communities, such as Rochelle, have taken steps to reinstate the tax or return it as a smaller charge.

Preparing his city’s upcoming budget, Nicklas sees two options for DeKalb: keep the tax, or let it discontinue.

“Keeping the same tax is going to be one of the options, and I’m not going to preview what the answer’s going to be,” states the city manager. “If we don’t replace it, what don’t we spend?”

Nicklas says he understands the tax’s elimination may benefit working- and middle-class families, but his budgeting process “isn’t about where our heartstrings are.” One figure from WTTW estimates Illinois cities and towns could close $350 million in funding starting Jan. 1.

Durand Mayor Sheila Hoffman shares a similar predicament. While her village differs in size from DeKalb (1,390 residents v. 40,211), she braces for a sprawling impact from the tax’s elimination.

“This year, with the budget, we‘ve really skimmed back as much as we can,” notes Hoffman. According to estimates from the mayor, Durand could lose $50-70,000 in annual revenue without the grocery charge.

Hoffman also focuses on the benefit those in Durand could see in their wallets once the 1% fee evaporates.

“We all have that same pressure on us to perform to the best of our ability for the taxpayers, but to also have the responsibility of maintaining the books to the best of our ability,” she holds.

The mayor sets a deadline for October to decide what’s next for local taxation (a similar goal for Nicklas’ budget proposal). Yet, she mentions where her final choice may rest.

“We‘re not rushing into that decision. Unless we really need to, we‘ll let that lapse with the state,” concludes Hoffman.

Each leader mentions a possible reinstatement depends on council member choices and public feedback. Nicklas suggests the decision process could use more research/data – especially focusing on household incomes in DeKalb.

“What we like to do in democracy is to have some objective basis on which to make decisions, and we‘re going to be lacking in that,” argues Nicklas. “Nobody’s got a chart.”

On Wednesday night, DeKalb County Board members began considering a county-wide 1% grocery tax.

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